Social Media

I Can Haz $$$: Cheezburger Network Scores $30 Million in Funding

So this is nothing to LOL at: The Cheezburger Network, an Internet publisher known for popular memes like LOLcats and FAILS, has just scored a $30 million Series A led by Foundry Group, with participation from Madrona Venture Group, Avalon Ventures, and SoftBank Capital as well.

What's truly staggering about this news is not merely the sum, but the fact that this is the company's first institutional round of funding — in the past, journalist-turned-entrepreneur Ben Huh and company bootstrapped and relied on a $2 million angel round and revenue to survive. (Huh reports that it has been profitable since its birth, raising money via advertising, old media (books, etc) and merchandising.)

"We're a bit of an oddball, and we're okay with that," Huh says with regard to the unprecedented influx of cash.

The Cheezburger Network, founded in September 2007, will use the hefty chunk of change to hire more employees and fund marketing and growth initiatives.

According to Huh, the aim is "to do what we do faster and bigger." The site's traffic and fan base is staggeringly big — the network has a readership of 16.5 million people who share more than 500,000 pictures and videos a month, and those same folks view 375 million pages and 110 million videos a month as well.

Huh was planning on hiring 20-30 new staffers by the end 2011, but now he's looking to take bigger risks and push up the hiring schedule. On January 18, new jobs will be posted to the site, many of which will be engineering jobs. Those engineers will be responsible for making sure the site runs smoothly as it grows.

"With more money in the bank we can start spending ahead of the revenue," Huh says. "We don't have to stock away money anymore."

Brad Feld of the Foundry Group, Greg Gottesman of Madrona Venture Group and Rich Levandov of Avalon Ventures will also be joining the company's board.

It may seem odd that a company that produces and proliferates memes would be able to attract such attention from investors, but, as Ben Huh said at the Web 2.0 Summit the creators of meme are "the rockstars of tomorrow." When something goes viral, it — obviously — gets a lot of eyeballs (see Ted Williams's video scoring more than 13 million views and attracting the attention of scads of advertisers), which is an attractive prospect for investors.

In addition, the Foundry Group has also invested in startups such as Zynga and Topspin, so its denizens are obviously savvy about the importance of web culture.

“Cheezburger has an amazing ability to always be at the intersection of Internet, society, and culture — which is highly attractive not just to consumers, but increasingly important as brands look to engage consumers with content and advertising,” says Rich Levandov, managing director of Avalon Ventures. “They’ve cracked the online media nut and the new financing will further accelerate the company’s aggressive growth strategy," he adds.

When it comes to content, Huh wants to continue to go bigger and better. "We want to make more celebrities," he says. "We want to make more people more famous for what they love to do."

And, hopefully soon, that content will also be available on more mobile platforms — including Android and iPhone, according to Huh (it's already on Windows Phone 7). "We want to be where [people] are," he says. "You shouldn't be in front of laptop to enjoy five minutes of happiness."

That five minutes of happiness seems to be what Huh and the network are focusing on at present. When asked if the company would eventually go public, Huh said, "That's crazy talk. I don't even schedule things two months out."

"There's no real endgame for the site," Huh says. "We never thought about world domination, we just thought about serving the needs of our users, making them more happy every day."

Well, considering that a website that once centered around pictures of cats is now swimming in VC cash, the idea of an IPO doesn't seem that far-fetched.

This recent influx of money calls to mind a similar investment in blogging platform, Tumblr, who also recently raised $30 million in funding. Tumblr, which had previously acted as a mere platform, has been stepping up its content curation strategy of late, leading web-savvy folks to speculate about its profitability (which could get a kick in the you-know-what with the introduction of ads).

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